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Amanager is trying to decide whether to buy one machine or two only one machine is purchased and demand proves to be the second machine

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Amanager is trying to decide whether to buy one machine or two only one machine is purchased and demand proves to be the second machine can be purchased stor some would be lost however, because the lead time for delivery of this type of machine is sx months in addition the cont pour machine will be lower both machines are puched in the same time. The probability of low demand is estimated to be 020 and that of high demand to be 0.80 The worx NPV of the benefits from purchasing two machines together is $70.000 af demand wand $170,000 i demand is high it one machine is purchased and demand in iow the NPV in $120.000 i demand is not the manager has toe optom (1) doing nothing which has in NPV Of S120,000, subentracting with an NPV of $150,000 and (3) buying the second machine with an NPV 5140.000 . Choose the correc decision treo for this problem. Note that each payoftes given thousands of dollars A Buy 1 machine Low demand -70 Do nothing High demand Subcons Low demand Buy 2 120 machines High demand 170 120 150 140 machine Low demand 020 120 Do nothing High and Subcontract 000 Low demand Duy 020 -70 machen high demand 010 1/0 120 1503 140 Buy 2 machines Duy machines OC OD Buy 2 machines Buy machino Low demand 120 Do nothing 0.00 High demand Subcontract 020 Buy 2 Low demand 70 machines 030 High demand 170 0.20 120 1500 140 Low demand 120 020 Do nothing Hohenand Subcontract 000 Buya Low demand machines 70 0.20 120 150 Buy 1 mach Buy 2 machines

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